How to manage payments at a medical clinic

April 12, 2022
April 12, 2022

Your medical clinic wants to manage overhead and its payments from doctors. Using Pre-authorized Debits (PADs) allows a medical clinic to collect payments from their doctors on time, every time.

By agreeing to an automatic withdrawal, both payor and payee avoid any late payments or additional fees and avoid the hassle of writing and keeping track of e-transfers and paper cheques. 


So then, how do you organize and implement PADs into a clinic’s bookkeeping workflow? Sean Birdsell of Birdsell Consulting shares his step-by-step process of implementing PADs at his clients’ clinics:

  1. Review the current procedures and calculations – how is overhead calculated, how often is it calculated and collected, and is there a reconciliation process to figure out actual vs estimated expenses?
  2. Gather PAD agreements from participating physicians, and set up a Rotessa account for the clinic itself that’s linked to Xero.  You’ll need to create linked contacts in Xero and Rotessa, and ensure Auto-Sync is turned on in Rotessa so the invoices get paid automatically! 
  3. Create new recurring invoice templates in Xero to ensure the calculations are consistent and correct.  Create an invoice and invoice email template that explains the Rotessa process and timing.
  4. When the overhead cycle closes, run whatever billing or schedule reports are necessary to calculate overhead shares.  Use your new recurring invoices to plug in the necessary overhead information, approve the invoices, and email them out!
  5. Sit back – Rotessa will take care of the rest.

Clinics determine overhead in lots of different ways, but it usually depends either on how much the physician billed during the period, or how much time they spent working in the clinic.

A PAD agreement is easy to incorporate into existing contracts, and the physicians just provide a void cheque with their documents.

At the end of the billing period, the bookkeeper runs a report and invoices each physician directly using Xero. This keeps all the calculations and evidence of how overhead was calculated all in one place: no need to refer back to spreadsheets or EMR schedules at the end of the year.

The Xero templates remind the physician in the body of the email and on the invoice that the invoice will be paid automatically. No cheques or email transfers are required!

Then Rotessa takes care of the rest! Rotessa automatically grabs the invoice, sets up the transfer to the clinic, and reconciles it back to Xero.

Managing payments at a medical clinic are made easy with Rotessa and Xero.